Twin Cities Housing Market nearly out of the Rut?

The gap between current and year-ago listing activity continues to widen, as anticipated. Expect the supply-side numbers to show sizable year-over-year declines due to the high baseline set during the spring 2010 tax credit. It should be noted that we are now approaching a period where we’ll be comparing the 2011 non-tax credit market to the 2010 tax credit market at its peak level.

For the week ending February 19, there were 690 signed purchase agreements, which made for a 12.1 percent decline from the same week last year. There were 1,367 New Listings for the week, representing a 25.4 percent decline from a year ago. Active Listings, at 21,642, have been holding steady since the beginning of the year due to subdued seller activity coupled with fairly reliable sales volumes. That marked a 3.3 percent decline from year-ago inventory levels.

A more meaningful comparison is to look back at 2009 and 2008 and avoid tax credit stimulated activity. This week’s 690 Pending Sales fall right in between 2008 and 2009 numbers. While that is less buyer activity than we would like, it does provide hope for the future. – MAAR

New Listings mimicked last years movement although there was hardly a change in New Listings for this week. Pending Sale took a surprising direction by decreasing this past week, down 12.1% from last year. Active Listings spent their third week below last years, down 3.3%. Days on the Market soared up to 146 Days suggesting more price corrections occurred over the Winter mimicking the expected 5 – 10% loss in home prices. Percentage of List Price also declined, down 5.4% from last year, confirming there were price corrections over the Winter. Although The Supply Demand Ratio continues to drop. There are now 6.53 homes for every buyer compared to November where there were 10.82 homes for every buyer. Housing Affordability hit another all time high this past week up 13.2% form last year. Months Supply of Inventory has declined again, now at 7.6 months of Inventory.

It appears prices have taken a dive over the Winter, which was expected, and homeowners have decided not to sell after all as inventory has been declining and there are fewer options for buyers even though affordability is at an all time high. Prices are expected to be flat for 2011 and it appears we’re nearly out of the rut.